The U.S. dollar was near flat on Tuesday in Asia as traders remained cautious about situation in the Middle East.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies last traded at 96.360 by 12:42 AM ET (04:42 GMT), up 0.01%.
The U.S. has no plans to pull its troops out of Iraq, Defense Secretary Mark Esper said on Monday, following reports of a U.S. military letter informing Iraq officials about the repositioning of troops in preparation to leave.
Last week, U.S. President Donald ordered a drone strike in Baghdad and killed Iranian military commander Qassem Soleimani, raising tensions between the two nations. Iran’s leaders have promised to avenge the killing.
ISM non-manufacturing PMI is due later in the day. Factory orders and trade balance data are also due.
On Monday, data showed the U.S. manufacturing sector contracted in December by the most in more than a decade, with order volumes crashing to a near 11-year low and factory employment falling for a fifth straight month.
On the Sino-U.S. trade front, Washington and Beijing are expected to sign a phase one deal on Jan. 15.
Meanwhile, the safe-haven yen gained on Monday amid heightened geopolitical tensions, but lost momentum today and dropped 0.1% against the U.S. dollar.
The USD/CNY pair lost 0.3% to 6.9553. China is due to report its latest CPI and PPI data on Thursday.